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  • Foreign income

    Generally, your clients must declare all income they received from foreign sources during the financial year in their tax returns.

    Foreign income includes:

    • business income
    • foreign employment income
    • most pensions and annuities
    • bank interest
    • dividends
    • royalties
    • rent
    • capital gains
    • personal services income.

    Help your clients get their tax returns right by advising them:

    • In some instances, they must include foreign income amounts that are attributed to them under Australian tax laws, even when the amounts are not actually received by them.
    • Certain foreign employment income is exempt from tax in Australia, but they may still need to include it in their tax returns.
    • If they paid foreign tax in another country on income they received, they may be entitled to an Australian foreign income tax offset that stops them paying tax twice.

    This tax time, we will be focussing on dividends from foreign companies (including associates controlled by family members) and distributions from foreign trusts.

    Remind your clients that the foreign income data we exchange with other countries has increased in recent years, and that information is now automatically shared with us.

    See also:

    Last modified: 26 May 2017QC 45701